Xia et al v. Harrah's Arizona Corporation
Filing
22
ORDER denying 11 Motion to Dismiss for Lack of Jurisdiction. Signed by Chief Judge G Murray Snow on 5/10/24. (DXD)
1
WO
2
3
4
5
6
IN THE UNITED STATES DISTRICT COURT
7
FOR THE DISTRICT OF ARIZONA
8
9
Jie Xia, et al.,
No. CV-23-02086-PHX-GMS
Plaintiffs,
10
11
v.
12
Harrah’s Arizona Corporation,
13
ORDER
Defendant.
14
15
16
17
Pending before the Court is Defendant Harrah’s Arizona Corporation’s Motion to
Dismiss (Doc. 11). For the reasons detailed below, Defendant’s Motion is denied.
BACKGROUND
18
19
The Plaintiffs in this matter are five individuals—Jie Xia, Necy Sundquist, Mary
20
Grace Abon, Susan Samons, and Maria Henry—who each allege Defendant violated
21
various federal laws, including 42 U.S.C. § 1981 and provisions of Title VII, when it
22
terminated Plaintiffs’ employment. Plaintiffs are all non-white, female former employees
23
of Defendant. (Doc. 1 at 2–3).
24
Defendant is a Nevada corporation that, pursuant to a management contract with the
25
Ak-Chin Indian Community (“Community” or “Tribe”), operates and manages the
26
Ak-Chin Casino and Resort in Maricopa, Arizona. (Id. at 2, 9). The Community is a
27
federally recognized Indian tribe. (Doc. 11-1 at 2). In the Summer of 2022, Harrah’s added
28
an electronic craps game called Roll To Win to the casino floor. (Doc. 1 at 3). Roll To
1
Win automated many functions of a traditional craps game, requiring the employee running
2
it to merely input the results of dice rolls. (Id. at 3–4). Defendant believed that, due to the
3
automation, Roll To Win required less training to operate and, as a result, employees were
4
sometimes tasked to operate Roll To Win despite the game not being part of their regular
5
rotation. (Id. at 4). Plaintiffs were five of such employees. (Id. at 6).
6
Over time, Defendants became aware that the Roll To Win tables, as operated, were
7
vulnerable to various cheating strategies used by certain gamblers. (Id. at 5). After
8
identifying these strategies, Defendant initiated an investigation which identified between
9
thirteen and nineteen table dealers who were working the Roll To Win tables while
10
cheating occurred. (Id. at 6). Plaintiffs allege they received specific written guidance on
11
how to manage the Roll To Win tables only after Defendant completed its investigation.
12
(Id.). After Defendant’s investigation, the Ak-Chin Tribal Gaming Agency (“Agency”)
13
began the process of revoking Plaintiffs’ gaming licenses, during which Plaintiffs were
14
suspended from work without pay. (Id.). Plaintiffs allege that Caucasian and male
15
employees who managed Roll To Win tables when cheating occurred were not suspended.
16
(Id.). At hearings before the Agency, Defendant argued that Plaintiffs colluded with the
17
cheating gamblers, and made those same representations to tribal police and the FBI. (Id.
18
at 7). Despite there being no criminal charges brought against Plaintiffs, all five Plaintiffs
19
were ultimately terminated from their employment. (Id. at 8). This was each of Plaintiffs’
20
first disciplinary action; Plaintiffs never received any warning or coaching prior to
21
termination, which are typically given in disciplinary cases prior to termination. (Id.). In
22
a separate investigation by the Arizona Department of Gaming (“ADOG”), the ADOG
23
refused to revoke Plaintiffs’ gaming licenses and instead determined that cheating occurred
24
because of Defendant’s failure to properly train. (Id. at 9–10).
25
On October 5, 2023, Plaintiffs filed this action against Defendant alleging
26
discrimination and retaliation under 42 U.S.C. § 1981, wrongful termination and retaliation
27
under Title VII, and termination in violation of public policy under state law. (Id. at 10–
28
15). On December 12, 2023, Defendant filed a Motion to Dismiss solely arguing this Court
-2-
1
lacks subject matter jurisdiction because of the Community’s sovereign immunity.
2
3
DISCUSSION
I.
Legal Standard
4
Federal courts are courts of limited jurisdiction. Stock W., Inc. v. Confederated
5
Tribes of the Colville Rsrv., 873 F.2d 1221, 1225 (9th Cir. 1989) (quoting Owen Equip. &
6
Erection Co. v. Kroger, 437 U.S. 365, 374 (1978)). When subject matter jurisdiction is
7
challenged, the party asserting jurisdiction has the burden of establishing that it exists.
8
Kingman Reef Atoll Invs., L.L.C., v. United States, 541 F.3d 1189, 1197 (9th Cir. 2008).
9
Parties may bring either facial or factual subject matter jurisdiction challenges. A facial
10
challenge asserts that the complaint, on its face, fails to allege facts that would invoke
11
federal jurisdiction. Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir.2004).
12
A factual attack, on the other hand, disputes the veracity of allegations in the complaint
13
that would, if true, invoke federal jurisdiction. Id. When resolving a facial attack on
14
subject matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1), the Court
15
accepts the allegations of the complaint as true. Mason v. Arizona, 260 F. Supp. 2d 807,
16
815 (D. Ariz. 2003).
17
II.
Analysis
18
Defendant challenges this Court’s subject matter jurisdiction by arguing it is
19
protected by the Community’s tribal sovereign immunity. “Indian tribes are ‘domestic
20
dependent nations’ that exercise inherent sovereign authority over their members and
21
territories. Suits against Indian tribes are thus barred by sovereign immunity absent a clear
22
waiver by the tribe or congressional abrogation.” Okla. Tax Comm’n v. Citizen Band
23
Potawatomi Indian Tribe of Okla., 498 U.S. 505, 509 (1991). Tribal sovereign immunity
24
extends to tribal business activities. Allen v. Gold Country Casino, 464 F.3d 1044, 1046
25
(9th Cir. 2006). Whether a particular business venture enjoys tribal sovereign immunity
26
turns on whether “the entity acts as an arm of the tribe so that its activities are properly
27
deemed to be those of the tribe.” Id.
28
-3-
1
2
3
4
5
6
In determining whether an entity is entitled to sovereign
immunity as an ‘arm of the tribe,’ we examine several factors
including: ‘(1) the method of creation of the economic entities;
(2) their purpose; (3) their structure, ownership, and
management, including the amount of control the tribe has over
the entities; (4) the tribe’s intent with respect to the sharing of
its sovereign immunity; and (5) the financial relationship
between the tribe and the entities.’
7
White v. Univ. of Cali., 765 F.3d 1010, 1025 (9th Cir. 2014).
Accordingly, non-
8
governmental tribal businesses commonly enjoy sovereign immunity. See Allen, 464 F.3d
9
at 1047 (holding a casino wholly owned and operated by the Tribe enjoyed sovereign
10
immunity); Breakthrough Mgmt. Grp., Inc. v. Chukchansi Gold Casino & Resort, 629 F.3d
11
1173, 1191–92 (10th Cir. 2010) (holding a Tribal Economic Development Authority,
12
formed under the laws of the tribe, enjoyed sovereign immunity).
13
Under the above factors, Defendant is not an arm of the Community and, thus,
14
cannot claim the Community’s sovereign immunity. First, Defendant is formed under the
15
laws of the state of Nevada, not under the laws of the Community. Second, while
16
Defendant’s successful operations results in increased Community funds, Defendant is a
17
for-profit corporation. The profits it generates are not returned to the Tribe, but to the
18
corporate shareholders. While Defendant presumably generates these profits through its
19
expertise in managing and operating the Community’s casino, such profits are not the
20
Tribe’s. Even though the Community’s purpose in contracting with Defendant is to
21
generate revenue for the Tribe, Defendant’s purpose is to take a portion of that revenue for
22
its shareholders, which, notably, does not include the Community.
23
Third, as mentioned above, the Tribe does not own or manage the Defendant. The
24
Community may have leverage over the Defendant in that it can choose to terminate its
25
management agreement with Defendant. The Community also has the regulatory control
26
that any sovereign has over a gaming operation within its sovereign territory. To the extent
27
there is any other direct Community control over Defendant, such control does not rise to
28
such a level so that Defendant is an arm of the tribe.
-4-
1
Fourth, there is no evidence that the Community ever intended to share its sovereign
2
immunity with Defendant. There are no declarations by Community Council, sections of
3
the management agreement, or ordinances that indicate Defendant may use the Tribe’s
4
sovereign immunity. Finally, as discussed above, the financial relationship between the
5
Community and the Defendant is clear: The Community pays Defendant to operate and
6
manage the Community’s casino using its expert knowledge.
7
Defendant earns a fee. The Community does not, for example, own any portion of
8
Defendant.
9
10
For those services,
Considering these factors, Defendant is not an arm of the Community. Accordingly,
Defendant does not enjoy the Community’s sovereign immunity.
11
CONCLUSION
12
Accordingly,
13
IT IS THEREFORE ORDERED that Defendant Harrah’s Arizona Corporation’s
14
15
Motion to Dismiss (Doc. 11) is DENIED.
Dated this 10th day of May, 2024.
16
17
18
19
20
21
22
23
24
25
26
27
28
-5-
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?